Selling innovation to the organisation
In the previous article I discussed how to make innovation tangible in your business so that it is not only an “academic” or “theoretical” concept. The key advice in that article was that you must communicate the innovation imperative, demystify innovation and make it part of everyone’s roles.
Established organisations are designed to operate efficiently and to execute a repeatable and scalable business model. Hence, businesses looking to be innovative face a conundrum: Every policy and procedure that makes them efficient execution machines stifles innovation. When the organisation’s leadership realises that they need to innovate to stay competitive and survive, the “efficiency drivers” have to start singing a different tune. It is not so easy to change habits, cultures and attitudes overnight, so they need to sell innovation to the business.
I first want to take a step back and look at why it is a challenge for an established organisation to start innovating. Paradoxically, in spite of their seemingly endless resources, innovation inside of an existing organisation is much harder than inside a start-up. For most organisations it feels like innovation can only happen by exception and heroic efforts, not by design. The question is: Why?
We know that a start-up is a temporary organisation designed to search for a repeatable and scalable business model. The corollary for an enterprise is: A company is a permanent organisation designed to execute a repeatable and scalable business model. Every large organisation, whether it can articulate it or not, is executing a proven business model. A business model guides an organisation to create and deliver products/services and make money from them. It describes the product/service, who is it for, what channel sells/delivers it, how demand is created, how does the business make money, and so on.
Somewhere in the history of the business, it too was a start-up searching for a business model. But now, as the business model is repeatable and scalable, most employees take the business model as a given, and they focus on the execution of the model – which is what they are supposed to do every day when they come to work. They measure their success on metrics that reflect success in execution, and they reward execution.
So what are some of the best strategies for getting buy-in to a change or innovation effort, i.e. selling innovation? People only change when they feel a force that compels them to take action. So, the most important task in getting buy-in is to understand the forces that affect people – i.e. the forces influencing their behaviour. Brett Clay, author of “Selling Change”, put these forces into four categories: 1. The person’s own internal needs that he or she is striving to fulfil; 2. The person’s behavioural tendencies or personality traits; 3. The strategies the person intentionally uses to manage his or her behaviour; 4. Environmental forces outside of the person’s direct control. “Buy-in” to an innovation or change initiative occurs when people conclude that, within the context of the forces influencing them, the initiative is compelling. Therefore, through understanding of the forces people are feeling, leaders will be better able to create compelling cases for change. What are these compelling cases? By incentivising efficiency performance. How about incentivising the submission and implementation of new ideas? Another compelling case is to identify and reference companies that are enjoying the fruits of their systematic approach to innovation. Clay also advises that the most important culture change is to reward risk taking. Every large success in business is the result of a significant change or innovation that involved substantial short-term and long-term risk. Yet, most managers are only rewarded for short-term business performance.
Next time I want to discuss the topic of business model innovation. I conclude with a quote from Linda Ellerbee: “What I like most about change is that it’s a synonym for ‘hope’. If you are taking a risk, what you are really saying is: I believe in tomorrow and I will be part of it.”
Blank, S. 2013. Why companies stop innovating. Online: http://www.inc.com
Clay, B. 2011. Selling innovation change. Online: http://www.innovationexcellence.com